Business expenses

Currently, there are 0 users and 1 guest visiting this topic.
Viewing 15 posts - 1 through 15 (of 16 total)
  • Author
    Posts
  • #43439
    churdle
    Participant

    I know the topic of business expenses has been covered many times on here but have a tricky question I would like opinions on.

    Our customer relocated to West Yorkshire from Somerset in 2010 but still runs a dance school in Somerset and travels there each weekend.  The cost of fuel/motoring is her third highest business expense.

    Is this just travelling to and from a place of work or a 'wholly and exclusively incurred' business expense?  If it is a  'wholly and exclusively incurred' business expense, is it excessive?

    As a bit of background, she has had the business since 1998 so will presumable have an established client base, she also pays staff to teach classes but is not known if she teaches any herself.

    #123286
    walmslm
    Participant

    Heck of a commute, I’d look at those books very closely as you’d think the school must be doing pretty well for itself for her to travel that distance every weekend to keep it going?

    I wouldn’t include it myself, but I think it’s one that could be argued either way.

    #123292
    nickkeogh
    Participant

    As long as you’re satisfied that she is travelling down to Somerset each weekend for the sole purpose of her business then these expenses are exactly what it says on the tin and should be disregarded in my view. It’s a long way to travel but a lot of benefit contractors do the same thing every week (and much further than Yorkshire – Somerset).

    #123300
    John Boxall
    Participant

    Where is her normal place of business? Does she run other dance classes? If she does then she probably doesnt have a ‘normal place of work’ if however she’s only running the one in Somerset, then it’s her ‘normal place of work’ and the travel expenses dont fall to be disregarded

    Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

    Wilkins Micawber, Ch12 David Copperfield

    #123301
    walmslm
    Participant

    [quote=nickkeogh]As long as you’re satisfied that she is travelling down to Somerset each weekend for the sole purpose of her business then these expenses are exactly what it says on the tin and should be disregarded in my view. It’s a long way to travel but a lot of benefit contractors do the same thing every week (and much further than Yorkshire – Somerset).[/quote]

    And they get paid a fair wage for doing so, hence why I was suggesting that a low income from the business / no wage paid might need investigating closely.

    #123315
    nickkeogh
    Participant

    [quote=John Boxall]Where is her normal place of business? Does she run other dance classes? If she does then she probably doesnt have a ‘normal place of work’ if however she’s only running the one in Somerset, then it’s her ‘normal place of work’ and the travel expenses dont fall to be disregarded[/quote]

    But if she’s self employed then isn’t her home also her business base so to speak which would make these expenses allowable regardless of how many dance classes she has?

    Getting a feeling of deja vu with this thread to be honest.

    And I take your point Matthew about contractors getting well paid etc but I was just using them as an example – other less well-off people have to travel to work long distances – sign of the times.

    #123335
    andyrichards
    Participant

    I once knew someone who did a fair bit of driving for work, but whose “normal” place of work was an office near his home. If he was going to be heading straight off up the motorway for his first appointment of the day, he would make a point of “stopping by the office” first. He said that he had to record a separate home-to-work journey beforehand in order to claim the main journey as a business expense for tax purposes.

    I would say that if her Somerset dance class is her only work then what she does is a home-to-work journey that is not allowable. On the other hand if it is one of many jobs she travels to then it probably is allowable. We tend to regard all travel as allowable if the work is essentially mobile (i.e. the person has to travel to their customers rather than have the customers come to them). In alot of those cases, their “base” (if they have one) is their home – where they do their admin/paperwork from. If they have some other base (like a workshop or shop), then the journey from home to there is not allowable, even though other onward journeys would be.

    #123340
    John Boxall
    Participant

    Reg 38(3) says

    (3) For the purposes of paragraph (1)(a) the net profit of the employment shall, except where paragraph (9) applies, be calculated by taking into account the earnings of the employment over the assessment period less—
    (a) subject to paragraphs (5) to (7), any expenses wholly and exclusively incurred in that period for the purposes of that employment;

    Now, is the travel to Somerset

    ……wholly and exclusively incurred in that period for the purposes of that employment;

    Or a consequence of her move to Yorkshire??

    Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

    Wilkins Micawber, Ch12 David Copperfield

    #124473
    churdle
    Participant

    Update

    The claimant tells us that she does employ a number of teachers for classes during the week but that she has teaches a class on a Saturday because one person she employs has no teaching qualifications yet and does not have the experience/confidence to take the class themselves. Also our claimant says that there are exams being taken which requires her to be there most weekends.

    I’m still of the opinion that having relocated 2 years ago from Somerset to West Yorkshire she could have made adequate arrangements in that time to limit the amount of times she needs to travel to Somerset. Also that this is still just travel to and from a place of work rather than an expense caused by her work. By that I mean that if she took a dance class to a theatre then the travel there and back would be a business expense but to travel to the venue where she works isnt. As Andy Richards points out – we wouldn’t allow this for an employed person who commutes to and from a place of work so why for a self-employed person?

    #124478
    peterdelamothe
    Keymaster

    I dont think there is much doubt myself. These are costs to and from work and are not an expense that can be allowed; think of all the commuters who travel a long way in the mornings and pay huge season ticket prices. Suggest they send them to the Revenue or the DWP and ask for this to be allowable for tax or disregarded. We all know the answer…

    #124483
    Andy Thurman
    Keymaster

    Peter – I’m surprised by your comments here. The rules for the employed are somewhat irrelevant in that they are commuting to their place of work. The key here is the business address for this “dance school”.

    I have been lucky enough to get quite a bit of (hopefully ongoing!) work close to home with a low level of travel expenses as a result but, if I move (& with it, relocate my business) to the Hebrides I will have a much bigger expense – it would still be a business expense, tax-deductable. It wouldn’t be a clever move but it would still be a business expense.

    #124489
    peterdelamothe
    Keymaster

    Taken from a guide to tax and the self-employed.

    “…and expenses you can’t

    Travel between home and workplace”.

    To me, it is fairly clear this is her normal workplace. I must admit that I have frequented a dance school near where i live, despite having two left feet (Blame Ghita and “Strictly”). That is very different from travel up and down the UK on specific contracts.

    Last week we had the example on here of a self-employed claimant who runs a fish and chip shop. If he catches a bus to work every day and back, he cannot claim that as a business expense. If he travels to the market twice a week to buy the fish and potatoes then that is definitely a business cost and allowable because it is solely done as part of the business.

    #124490
    John Boxall
    Participant

    Can you and Ghita give us a twirl at the next conference?

    In particular we want to see you drag her across the floor, a la John Sergeant

    🙂

    Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

    Wilkins Micawber, Ch12 David Copperfield

    #124515
    Andy Thurman
    Keymaster

    Perhaps I should have left Jon with the last comment here! I see where Peter’s coming from now re the travel to work – my personal experience of “dance schools” (wife & kids only before Jon’s request gets extended!) are classes held in halls/leisure centres/colleges etc. i.e. no school building as such. I guess the answer here lies in what ‘dance school’ actually means. Is it the business’s own premises or a room in some other facility?

    #124516
    peterdelamothe
    Keymaster

    Always knew you could do a mean tango Andy!

    I think the days of an hour in a school hall are being overtaken by proper full-time facilities. Saturday evening TV shows have created a boom in dance, singing and artistic interest. The next generation may not be able to build products for export but they sure will be able to dance! :bigsmile: I looked up the Somerset dance schools before posting …all looked very professional to me.

Viewing 15 posts - 1 through 15 (of 16 total)
  • You must be logged in to reply to this topic.